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1/The next bull run has begun. Bitcoin has sprung from the 3Ks to 15K. The long awaited “institutions” are here building massive positions and beginning to publicly share their Bitcoin investment theses.
2/Despite the bear market opportunity and relative ease of self-custody many hold Bitcoin on exchanges and services. As the price 2X, 5X and 10Xs from here, newly minted Bitcoiners will find their bitcoins trapped.
3/Although generous with purchase limits, most Bitcoin exchanges have varying degrees of withdrawal limits. Limits are ostensibly to curb hacked account losses & monitor fraudulent transactions.
4/Exchanges have had more than their fair share of issues and controversy, creating opportunities for innovative, Bitcoin friendly retail-focused competitors such as Square’s CashApp
5/CashApp adoption has accelerated. Exponential user growth led to $1.6B of Bitcoin revenue in Q3 2020. However, those who have adopted CashApp will find their hard earned Bitcoin trapped on the service.
6/CashApp has $5k/week withdrawal limit.
If you purchased a bitcoin a few months ago at $5K, it would have taken you a week to move it off the service.
One bitcoin at $20K will take 4 weeks.
One bitcoin at $100K will take 20 weeks.
If you purchased a bitcoin a few months ago at $5K, it would have taken you a week to move it off the service.
One bitcoin at $20K will take 4 weeks.
One bitcoin at $100K will take 20 weeks.
7/Mobility is the domain of the rich and found on exchanges. Individuals with “pro” or “vip” status can move many more bitcoins. Eg, Coinbase Pro has $25,000/day limit. Still, a bitcoin at $100k will take 4 days. Kraken’s top tier has effectively no limit.
8/Denominating withdrawals in USD and creating arbitrary limits that on a dollar for dollar basis are more restrictive than traditional banks is the antithesis of what Bitcoin stands for. Yet nearly all Bitcoin on-ramps throttle exits particularly impacting retail buyers.
9/Whether by choice or not, storing your bitcoins on an exchange subjects you to unnecessary risk of theft, account suspension and seizure. Self-custody ensures access and reduces the ability of exchanges to engage in fractional reserve.
Fin/Do not rely on centralized authorities who can and will determine when and how fast you can move your bitcoins. This control will rapidly become extraordinarily difficult to overcome when Bitcoin’s price begins to climb in earnest.
Not your keys, not your coins.
Not your keys, not your coins.
